If an economy is producing on its production possibility frontier but is not producing what people want, the economy
A. is not achieving output efficiency.
B. is experiencing technological advancement.
C. is producing at more than one point on the production possibility frontier.
D. is not being productively efficient.
Answer: A
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The three broad reasons for saving, as identified by economists, relate to:
A. the life-cycle, precaution, and bequests. B. national, public, and private production. C. capital gains, capital losses, and deficits. D. consumption, investment, and exports.
Refer to the scenario above. The retailer adds a value of ________ to the production process
A) $3 billion B) $1 billion C) $10 billion D) $5 billion
The supply curve for loanable funds would decline due to
A) an increase in wealth. B) an increase in the expected return on bonds. C) an increase in expected inflation. D) a decrease in the riskiness of bonds relative to other assets.
Suppose the government imposes a per unit tax on an item whose production process creates a negative externality. Suppose the tax is exactly the value of the marginal externality cost. If the government now uses the tax revenue to clean up pollution from this process, the market will:
a. have internalized all costs and benefits. b. be inefficient. c. be destroyed. d. not have failed. e. be subject to obligatory controls.